Xiang Junbo, chairman of the China Insurance Regulatory Commission
The head of China’s top insurance regulator is under investigation by the Communist party’s corruption watchdog in the midst of an insurance industry crackdown that he has spearheaded.
Xiang Junbo, chairman of the China Insurance Regulatory Commission, is “suspected of severe disciplinary violations” according to a brief statement on the website of the Central Commission for Discipline Inspection, which has tackled official corruption under President Xi Jinping.
The CCDI gave no further details.
Mr Xiang, who rose to prominence after taking on some of the largest players in China’s insurance industry, was last seen in public last week attending a CIRC official ceremony. He has headed the CIRC and held a seat on the prestigious monetary policy committee of the central bank since 2011.
The CIRC under Mr Xiang battled a risky trend in the industry – the financing of risky foreign acquisitions and corporate raiding using high yielding policies that are effectively wealth management products rather than insurance for protecting policyholders. These policies provide guaranteed payouts on maturity, rather than protection against specific risk events.
China’s insurance sector has grown massively in terms of premiums on the back of these wealth management product sales.
In February the CIRC under Mr Xiang’s leadership banned China’s fourth-richest man, Yao Zhenhua, chairman of financial conglomerate Baoneng Group, from the insurance industry for 10 years as part of an effort to rid the sector of risky behaviour. The government wants the industry to focus on genuine insurance products, such as health insurance and pensions.
At a press conference in February, Mr Xiang said the agency “will never allow the insurance industry to be turned into a rich boys’ club” or become a “sanctuary of large financial crocodiles”. Mr Xiang previously warned that insurers cannot be “ATM machines” for corporate raiders.
Mr Xiang also promised to curb “aggressive” pricing and “unreasonably” high returns on some insurance products. He said insurers should not interfere with the management of listed companies. Instead, the industry should focus on its core function of providing risk protection. MDT/FT Exclusive
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